not be so registered because member-
ship in the College is predicated upon a
prescribed period of study and passing
qualifying examinations. From. their
very nature, these requirements can
only be met by natural persons.”

A case that would not be incon-
sistent with the requirements of the
profession, is one in which a doctor
incorporates a non-professional service
or management company to relieve him
of his professional duties by providing
him with staff, medical supplies, equip-
ment and accommodation.

In some provinces the Corporation
Act does not prohibit ‘‘persons applying
for the incorporation of companies to
carry on the practice of law, medicine,
accounting, engineering and any other
profession.” But “in actual fact...
most of the governing bodies of these
and other professions have, pursuant in
some cases to statutorily conferred
powers, passed rules or regulations pro-
hibiting persons subject to their juris-
diction from carrying on business in
incorporated form.”

 

AN INCORPORATION
MUST NOT BE AN
INCOMPLETE TRANSACTION

The documentation must
show the exitence of an agreement.

Pe salesman who was employed by a
[\sxment firm decided to form a
tukcompany. Of the 200 shares
issued, 198 were held by him, one by
his wife and one by a third party. Prior
to the formation of the company the
salesman received a commission on gross
sales from the garment firm and at times
employed other salesmen and secretaries
charging their salaries to his commis-
sion. After the formation of the com-
pany the salesmen and secretaries for-
merly employed by him were still
included in the garment firm’s pension
plan, unemployment insurance scheme,
blue cross and medical service benefits.
The Minister assessed the taxpayer for
tax on the commissions earned, ignoring
the existence of the company, and the
Tax Board allowed the salesman’s appeal.

On appeal to the Federal Court, the
court, in a judgement released April 30,
1973, allowed the Minister’s appeal.
The Federal Court took the position
that, although the salesman formed a
company, no written agreement had
been entered into between the garment
firm and the company and there was no
written document showing the relation-
r between the parties or stating the

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